The federal income tax is a tax levied or charged by the Internal Revenue Service (IRS)—the revenue service of the United States (federal) government. The federal income tax is a tax on the annual earnings of individuals, corporations, trusts, limited liability companies, and other legal entities.
Federal income taxes are levied on all types of earnings that make up a taxpayer’s taxable income—including earnings from employment and from capital gains (income earned on the sale of assets).
In California, as in all states across the United States, federal income tax is levied by the Internal Revenue Service (IRS) on the annual earnings of individuals, corporations, trusts, limited liability companies, and other legal entities. This tax applies to all forms of income that contribute to a taxpayer's taxable income, which includes, but is not limited to, wages, salaries, bonuses, and capital gains—the profits realized from the sale of assets such as stocks or real estate. The federal tax system is progressive, meaning that the rate of taxation increases as income rises. Taxpayers in California must comply with federal tax regulations and file annual tax returns with the IRS by the deadline, typically April 15th of each year, unless an extension is granted. It's important for taxpayers to understand that federal income tax is separate from state income tax, and they must adhere to both sets of laws.
